Elastic's Valuation Likely To Expand After Its 2019 Contraction

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About: Elastic N.V. (ESTC)
by: App Economy Insights
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App Economy Insights
Long-term horizon, portfolio strategy, analytical edge, behavioral edge
Summary

Elastic has proven to be a volatile investment since its 2018 IPO.

While valuation has been stretched a few times in 2019, shares snapped back to where they were at the end of their first day of trading.

If Splunk is any indication of Elastic's future performance, the company could see its market cap quadruple in the next decade.

With very high insider ownership, a fast-growing top line, and a radical approach with an open-source software, the right ingredients are in place.

While ESTC is not an investment for the faint of heart, I believe those with a long-term horizon beyond five years will do extremely well.

As the market hits new records time and time again, it can be difficult to find opportunities that offer huge upside potential. US-based SaaS companies, in particular, have greatly benefited from the current bull market